European Markets Lose Ground
STEVE INSKEEP, host:
NPR's business news starts with global stock markets still on edge.
Yesterday's sudden rate cut by the US Federal Reserve pacified investors in Asia, at least for now. But while Asian stock markets saw some big improvements over the last couple of days, the leading markets in Europe are all trading about 4 percent lower today. And we have more this morning from NPR's Rob Gifford, who is reporting from London.
ROB GIFFORD: They say that if America sneezes, Europe catches a cold. Certainly, European markets have reached for their handkerchiefs this past few days, though opinions seem divided about whether the Fed rate cut in the U.S. was a smart move or a sign of panic. The Bank of England won't confirm whether it'll follow the U.S. Federal Reserve with a rate cut of its own, but the bank's governor, Mervyn King, did sum up the pessimism that's currently stalking the British markets.
Mr. MERVYN KING (Bank of England): We face a difficult balancing act in the course of 2008. And to put it bluntly, this year we are probably facing a period of above-target inflation and a marked slowing in growth.
GIFFORD: Still, problems in the U.K. economy such as the housing market have not yet been as pronounced as in the U.S., and there is some continued optimism. Veteran financier George Soros agrees that recession in the U.S. and the U.K. is likely, but that's not the whole picture globally.
Mr. GEORGE SOROS (Financier): You've got China, India that are earning significantly more than they are spending. So I'm not looking for a worldwide recession. I'm looking for a significant shift of power and influence away from the U.S. in particular.
GIFFORD: Soros says that shift away from the U.S. and Europe as drivers of the world economy is the bigger message.
Rob Gifford, NPR News, London.
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